Gold falls to 1-week lows, pressured by stronger USD
• Strong follow-through USD buying continues to weigh.
• Overnight fall in US equities fails to lend any support.
• FOMC minutes to provide fresh directional impetus.
Gold traded with a mild negative bias through the early European session and is currently placed at one-week lows, around the $1326-25 region.
The US Dollar continues to strengthen across the board, supported by a strong upsurge in the US Treasury bond yields, and was eventually seen weighing on dollar-denominated commodities - like gold.
The precious metal gained little respite from overnight slide in the US equity markets, which tends to underpin demand for traditional safe-haven assets.
Meanwhile, expectations for a faster Fed monetary policy tightening cycle further collaborated towards driving flows away from the non-yielding yellow metal.
Hence, the key focus would be on the latest FOMC meeting minutes, which would provide fresh clues over the central bank's near-term monetary policy outlook and eventually provide some fresh directional impetus for the commodity.
Technical levels to watch
A follow-through selling pressure has the potential to continue dragging the metal towards $1318 horizontal level en-route the next major support near the $1310 region.
On the upside, $1329-30 area now seems to act as immediate resistance, above which a bout of short-covering could lift the commodity back towards $1340 supply zone.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
